Ranching

Times get tougher

Roughly 75 farmers and ranchers gathered in Dillon Sept. 12 to discuss a proposal from the Department of Natural Resources and Conservation to more than double grazing lease fees on state land. According to one attendee's assessment, ranchers' cynicism was universal.

"Their feelings was, if it's going to double, we'll just go rent private ground and let the state have their ground," says Harris Wheat. "I think [the DNRC] is in for a real wreck."

The DNRC's proposal would up minimum lease bids from $6.23 to $12.88 per animal unit month—a measure based on the amount of forage consumed by a 1,000-pound beef cow in a month. The State Land Board first pitched the increase this summer, hinging its finding on a recent third-party study into fair market value for grazing leases.

Nicole Rolf of the Montana Farm Bureau Federation believes the increase could prove devastating to stockgrowers statewide, especially in western Montana where urban development is making grazing land scarce. The DNRC has an estimated 8,500 active leases. The proposal would significantly hike costs for many ranchers who are already paying for fencing, weed control and irrigation on leased state land. "We're operating on fairly thin margins as it is," Rolf says. "We need to be able to budget ahead for any kinds of price changes."

DNRC Director Mary Sexton argues that if her department doesn't consider fair market value in its lease fees, the state could be sued for violating statute. Grazing is the largest single use of school trust lands in Montana, generating roughly $6.4 million in revenue for public schools last year. The proposed increase could raise as much as $5.2 million in additional revenue in 2012.

Staggering the increase to lessen the impact on stockgrowers could be an option, Sexton says. But the state did that with cabin leases on state land in recent years and was subsequently sued. The DNRC is encouraging ranchers to suggest alternative proposals.

Rolf says if the state does comply with the statute, the increase will likely drive some leaseholders to rent from private landowners. That would leave state land idle, Wheat says, eliminating revenues.

"All the guys I talked to [on Sept. 12]—and some of them are big old ranchers—said they just can't afford it. If the state's going to double it, they can just have their land back."